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Gable, Guy G. and Timbrell, Gregory T. (2001) The SAP Ecosystem: A Knowledge Perspective - in Proceedings 12th Information Resources
Gable, Guy G. and Timbrell, Gregory T. (2001) The SAP Ecosystem: A Knowledge Perspective - in Proceedings 12th Information Resources
Gable, Guy G. and Timbrell, Gregory T. (2001) The SAP Ecosystem: A Knowledge Perspective - in Proceedings 12th Information Resources
A Knowledge Perspective
Greg Timbrell
Guy Gable
Abstract
This paper derives from a parent study titled, Co-operative ERP Lifecycle Knowledge
Management [Gable et al, 1998]. The central goal of that study is to rationalise knowledge
management activities of the three key players involved in ERP lifecycle support; namely the
client, the vendor and the implementation partner or consultant. The consultant can play
varied roles in a greater or lesser capacity across client ERP installations. It is posited in the
parent study that the consultant’s role (and the roles of all key players) should be driven by a
carefully considered ERP lifecycle-wide knowledge sourcing strategy for the client.
Understanding the ERP knowledge marketplace and related dynamics is of clear value to the
development of such strategy. In this paper we tentatively explore the concepts of ‘knowledge-
sourcing’ and 'knowledge strategy friction'. We further describe a preliminary attempt to
instantiate these concepts through an exploratory, descriptive case study of the ‘SAP services
ecosystem’. A broader, related objective of the parent study is to test the power of a
‘knowledge sourcing world-view’ and the integrative potential and explanatory power of such
a perspective, with particular emphasis on ERP marketplace dynamics.
Keywords
Knowledge management, enterprise resource planning, ERP, enterprise systems, consulting
1 INTRODUCTION
This paper represents a qualitative, descriptive and exploratory case study of the knowledge
sourcing activities of consultants in relation to the ERP lifecycle. The context of the study is
the SAP ‘eco-system’. Data collection has primarily involved review of literature, discussions
and interviews with practicing ERP consultants, discussion and interviews with vendor
representatives from SAP, and reflection on the personal prior consulting experience of the
authors with the packaged software marketplace. Much of the literature reviewed were
proprietary industry reports (e.g. Gartner Groups, Yankee Group, Delta, etc.) which cannot be
cited. Little academic literature specific to the subject under discussion is available.
SAP-related work contributes the largest proportion of total revenues for several of the
world’s major consulting companies. These companies have made substantial investments in
their staff (fundamental SAP training for a new consultant costs $75,000), implementation
methods and tools, industry software templates (pre-configured SAP) and related R&D and
training facilities. SAP’s large implementation partners seek means of enhancing their
knowledge management strategies to further leverage their substantial ERP knowledge
investment.
With the object of further assessing the robustness and value of a 'knowledge sourcing' view
of the SAP ecosystem, we now turn to a quite specific development in the ecosystem over the
past three years that has had dramatic effect. As previously stated, SAP is concerned about
the high cost of implementation and in particular the effect of this high cost as they enter the
SME market. ASAP (Accelerated SAP implementation methodology, as of this writing now
called ValueSAP) is an internal response to this concern; a concerted effort to make an
implementation methodology cheaply available to the marketplace in presumably an attempt
to lower the cost of implementation expertise in the SAP marketplace.
While most very large organisations have already adopted ERP world-wide, increasingly
small- and medium-sized enterprises (SMEs) too are finding it cost effective and a
competitive necessity to follow suit. Marketplace developments, infrastructure technology
improvements, and improvements in ERP itself are all encouraging the uptake of ERP by
enterprises with revenues of less than $50 million. Globalisation and electronic commerce
require closer integration between large and small enterprises. The availability of powerful
microprocessor-based servers; scalable, full-function PC and network operating systems; and
low-cost, back-office software make the necessary client/server architectures increasingly
affordable.
In response to these developments and having saturated the larger organizations, ERP vendors
are making it easier for SMEs to adopt their packages, primarily by simplifying and reducing
the costs of implementation. In essence ERP vendors are reducing the amount of knowledge
required (to be sourced) by the client. This can be achieved in varying degrees through
turning off unneeded functionality, developing largely complete package templates (pre-
configuring the software for particular markets or market-niches), turn-key solutions
(packaging pre-configured ERP, database, operating system and network software; servers
and workstations; and installation and implementation assistance for a fixed price), and
outsourcing arrangements such as application service provision (ASP). For a detailed
discussion of ERP ASP's see Bennett and Timbrell (2000). In effect the vendors are reducing
the knowledge investment required to bring an ERP installation into existence. The ERP
vendors are also seeking to influence third-party package software implementation services
(consultants) in favor of their desired SME clientele. With implementation costs often far
exceeding the costs of the package software and related hardware, it is in implementation that
the greatest savings for SMEs are achievable.
ASAP has been embraced enthusiastically by a number of midsize Systems Integrators (SIs).
It saves them the continuous investment in a proprietary methodology and gives some of them
a short-term marketing advantage – e.g. ‘We finished the first ASAP implementation in the
utilities industry in less than 90 days.’ That the common methodology reduces their
differentiation against each other does not appear to bother many of these SIs. However, in
spite of their overt support for the concept, ASAP does bother the larger SIs for two reasons.
They do not want their differentiation diluted by a common methodology; and even though
ASAP is not holistic at this stage, SAP has been encouraging clients to measure SI proposals
against an ASAP template. Several SIs have said that SAP is underselling the implementation
effort. As with everything, the truth is somewhere in the middle. SAP believes a number of
large SIs spend too much time up front doing gap analysis and should, instead, accept that
SAP is function-rich and spend the time learning and finding appropriate features within the
product. Enterprises that want to implement SAP as is will find ASAP attractive, but they
should supplement the product configuration steps the methodology covers with coverage for
steps around the software for testing, data migration and other facets (Keller, 1998:42).
4 DISCUSSION
5 CONCLUSION
Thus we can see that a ‘knowledge sourcing’ view of the undulating SAP ecosystem is
revealing, and can help to explain many of the dynamics being observed. To better manage
their ERP lifecycle, clients need to adopt a lifecycle-wide knowledge sourcing strategy in
order to grow their ERP beyond initial implementation. We have seen that consultants are
providers and facilitators of knowledge during the implementation period. They provide
technical expertise and also guide the sourcing and knowledge creation activities of the client
that results in a working and relevant system.
In order to be competitive in the market and also to sustain their value proposition,
consultants need to have both superior technical expertise and superior knowledge sourcing
strategies to their clients. The advent of ASAP in the marketplace has altered the knowledge
supply agreement and diluted some of the consultants' previous advantage giving rise to
knowledge strategy friction. With ASAP the clients have easy access to both declarative and
procedural SAP implementation knowledge equal to that of any inexperienced consultant. In
Maister's framework, the consultants will have to move towards the experience practice,
given that the knowledge underpinning the efficiency practice is now more freely available.
References are available from the authors on request.